It seems to me that the problem arises whenever you go to extremes. Extreme socialism is unsustainable. In the end, it becomes too expensive to maintain. So is extreme capitalism. It leads to a breakdown in social cohesion that creates a level of civil unrest which then makes the conduct of business impossible. Somewhere, there is an optimum blend. When you swing to one extreme, you can bet that it's only a matter of time before you start swinging back toward the other.
Of course, paradise is impossible until you first resolve the unrest in the crazy ape's head.